Freshworks layoffs will affect about 500 employees globally after the software company announced an 11% workforce reduction on May 5, 2026. According to Livemint, Freshworks said artificial intelligence is reshaping the software sector and changing operational requirements across the business.
AI reshaping labour market changes software hiring trends
Freshworks layoffs reflect wider restructuring across the software industry as companies automate workflows and increase AI investment. Freshworks chief executive Dennis Woodside said AI use in engineering and product development contributed to the decision.
The company stated that over half of its code is now written by AI systems. Automation also reduced routine operational tasks across departments. These changes are altering workforce structures in software companies.
Freshworks layoffs affect teams across global operations
Freshworks layoffs will impact around 500 roles across departments worldwide. The company employed nearly 4,500 full-time workers at the end of December 2025.
Freshworks expects one-time restructuring charges of about $8 million. The company plans to reinvest savings into its Employee Experience business, including its Freshservice IT management platform.
Management is also merging sales teams and reducing management layers to improve operational efficiency.
AI reshaping labour market pressures software companies
Freshworks layoffs come as software firms face pressure from AI-driven competition and rising infrastructure costs. Companies are redesigning products around automation while attempting to reduce expenses.
Atlassian recently announced plans to reduce roughly 10% of its workforce. Meanwhile, AI companies such as Anthropic are increasing competitive pressure on traditional software providers including Salesforce, ServiceNow, and Freshworks.
The company’s stock has declined around 26% this year as investors monitor changes in the software market and AI adoption trends.
Freshworks layoffs add to tech sector job cuts across 2026
Freshworks layoffs add to broader workforce reductions across the technology sector in 2026. Layoffs.fyi reported that 92,462 technology employees have lost jobs globally this year.
At the same time, Freshworks projected second-quarter revenue between $232 million and $235 million. This estimate stands slightly above analyst expectations tracked by LSEG.
The company also reported first-quarter revenue of $228.6 million, reflecting 16% annual growth. Adjusted earnings reached 11 cents per share, below analyst estimates of 12 cents per share.
